Pay adjustment. You must raise and lower pay for incumbents in many positions. S
ID: 2722208 • Letter: P
Question
Pay adjustment. You must raise and lower pay for incumbents in many positions. Some will get fat raises; some will get huge cuts. (Yes, the case is rigged. There is no way you can enter numbers on the previous Excel sheets to prevent this from happening.) This really does happen when pay systems are rewritten to meet a new standard as in this case. Alum have told me they experienced it after taking this course. No, you may not make an across-the-board adjustment. That would defeat the pay strategy you just worked so hard to put in place. So, knowing that the pay for those positions must be adjusted to the new levels within 2 years, how would you handle it? How would you adjust pay, and how would you inform employees? And what are the ethical issues you see?
Explanation / Answer
A over pay budget could be set for the company and sub-budget could be set for each department in the company. For each employees job evaluation must be done using some scientfic method such as the hay method of job evaluation. the pay with an particular department must be adjusted based on the evaulation results , but it must be ensure that the overall adjustement for each dept is within the set budget, it must be a relative evaluation that is compariing the performance of employees against each other and the general performance of the entire company.
The employee must be formally informed in a meeting regarding the methodologies used for job evaluation and the pay adjustment that would take place over aperiod of 2 years. so they can put in their efforts to improve their performances, the only ethical issue here would be to cut the pay of an employee because his peers has performed better that him though his own performance was also reasonable and he has met all the expectations of the company.
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